Data Envelopment Analysis: Critique and Extensions
01 Dec 1986-New Directions for Program Evaluation (John Wiley & Sons, Ltd)-Vol. 1986, Iss: 32, pp 73-105
TL;DR: This paper pointed out serious shortcomings in DEA's treatment of price efficiency, illustrates the dangers of misspecification errors in DEA, and suggests extentions of the basic DEA formulation that address these shortcomings.
Abstract: This chapter points out serious shortcomings in DEA's treatment of price efficiency, illustrates the dangers of misspecification errors in DEA, and suggests extentions of the basic DEA formulation that address these shortcomings.
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TL;DR: A sketch of some of the major research thrusts in data envelopment analysis (DEA) over the three decades since the appearance of the seminal work of Charnes et al. is provided.
1,390 citations
Cites background from "Data Envelopment Analysis: Critique..."
...This approach was originated by Sexton et al. (1986), and was further investigated by Doyle and Green (1994), and others....
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TL;DR: Data envelopment analysis is a linear programming based technique for measuring the relative performance of organisational units where the presence of multiple inputs and outputs makes comparison difficult.
929 citations
TL;DR: In this article, the authors examined the performance of the top 55 U.S. commercial banks via a two-stage production process that separates profitability and marketability and uncovered substantial performance inefficiency in both dimensions.
Abstract: Utilizing recent developments in data envelopment analysis (DEA), this paper examines the performance of the top 55 U.S. commercial banks via a two-stage production process that separates profitability and marketability. Substantial performance inefficiency is uncovered in both dimensions. Relatively large banks exhibit better performance on profitability, whereas smaller banks tend to perform better with respect to marketability. New contextdependent performance measures are defined for profitability and marketability which employ a DEA stratification model and a DEA attractiveness measure. When combined with the original DEA measure, the context-dependent performance measure better characterizes the profitability and marketability of 55 U.S. commercial banks. The new approach identifies areas for improved bank performance over the two-stage production process. The effect of acquisition on efficiency and attractiveness is also examined.
878 citations
TL;DR: The purpose of this paper is to briefly trace the evolution of DEA from the initial publication by Charnes et al. (1978b) to the current state of the art (SOA).
Abstract: The purpose of this paper is to briefly trace the evolution of DEA from the initial publication by Charnes et al. (1978b) to the current state of the art (SOA). The state of development of DEA is characterized at four points in time to provide a perspective in both directions—past and future. An evolution map is provided which illustrates DEA growth during the 17-year period, the timing of the major events, and the interconnections and influences between topics. An extensive DEA bibliography is provided.
836 citations
TL;DR: No one methodology can be prescribed here as the complete solution to the question of ranking, as each technique is useful in a specialist area.
815 citations
Cites methods from "Data Envelopment Analysis: Critique..."
...The data has been drawn from the nursing home example developed in Sexton et al. (1986), in which six DMUs are compared over four variables: staff hours per day (StHr), supplies per day (Supp), total Medicare plus Medicaid reimbursed patient days (MCPD) and total private patient days (PPPD)....
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...Cross-efficiency models Sexton et al. (1986) a...
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References
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TL;DR: A nonlinear (nonconvex) programming model provides a new definition of efficiency for use in evaluating activities of not-for-profit entities participating in public programs and methods for objectively determining weights by reference to the observational data for the multiple outputs and multiple inputs that characterize such programs.
25,433 citations
Book•
01 Jan 1977
TL;DR: In this paper, the authors take into serious consideration the further development of regression computer programs that are efficient, accurate, and considered an important part of statistical research, and provide up-to-date accounts of computational methods and algorithms currently in use without getting entrenched in minor computing details.
Abstract: Description: Regression analysis is an often used tool in the statistician's toolbox. This new edition takes into serious consideration the furthering development of regression computer programs that are efficient, accurate, and considered an important part of statistical research. The book provides up-to-date accounts of computational methods and algorithms currently in use without getting entrenched in minor computing details.
2,811 citations
TL;DR: A model for measuring the efficiency of Decision Making Units =DMU's is presented, along with related methods of implementation and interpretation, and suggests the additional possibility of new approaches obtained from PFT-NFT combinations which may be superior to either of them alone.
Abstract: A model for measuring the efficiency of Decision Making Units =DMU's is presented, along with related methods of implementation and interpretation. The term DMU is intended to emphasize an orientation toward managed entities in the public and/or not-for-profit sectors. The proposed approach is applicable to the multiple outputs and designated inputs which are common for such DMU's. A priori weights, or imputations of a market-price-value character are not required.
A mathematical programming model applied to observational data provides a new way of obtaining empirical estimates of extrernal relations-such as the production functions and/or efficient production possibility surfaces that are a cornerstone of modern economics. The resulting extremal relations are used to envelop the observations in order to obtain the efficiency measures that form a focus of the present paper.
An illustrative application utilizes data from Program Follow Through =PFT. A large scale social experiment in public school education, it was designed to test the advantages of PFT relative to designated NFT =Non-Follow Through counterparts in various parts of the U.S. It is possible that the resulting observations are contaminated with inefficiencies due to the way DMU's were managed en route to assessing whether PFT as a program is superior to its NFT alternative. A further mathematical programming development is therefore undertaken to distinguish between "management efficiency" and "program efficiency." This is done via procedures referred to as Data Envelopment Analysis =DEA in which one first obtains boundaries or envelopes from the data for PFT and NFT, respectively. These boundaries provide a basis for estimating the relative efficiency of the DMU's operating under these programs. These DMU's are then adjusted up to their program boundaries, after which a new inter-program envelope is obtained for evaluating the PFT and NFT programs with the estimated managerial inefficiencies eliminated.
The claimed superiority of PFT fails to be validated in this illustrative application. Our DEA approach, however, suggests the additional possibility of new approaches obtained from PFT-NFT combinations which may be superior to either of them alone. Validating such possibilities cannot be done only by statistical or other modelings. It requires recourse to field studies, including audits e.g., of a U.S. General Accounting Office variety and therefore ways in which the results of a DEA approach may be used to guide such further studies or audits are also indicated.
1,544 citations